The Impression of a Surplus
This article from a few weeks ago shouldn’t pass into memory without comment:
Rhode Island finished the past fiscal year with a $29-million surplus, $25.5 million of which the state is already counting on in its budget for the current year, according to a preliminary accounting of the year that ended June 30.
State spending for the year that ended June 30 came in $12 million lower than the final, revised spending plan lawmakers approved earlier that month; state revenues were $2.1 million higher than expected.
Review the budget documents from the House Fiscal office for the real story. With less than two weeks remaining in the fiscal year, the state increased its final budget for that year by $174 million. This new “surplus” is just the extra wiggle room they gave themselves, and the fact that they are counting on almost all of it for the next year raises the question of how aware they were of the likelihood.
Of course, one could reasonably argue that the state ought to budget with the expectation of a small surplus. In that case, however, the story isn’t really about a surplus, but about the absence of an unforeseen deficit.
To say that the government ended the year with a surplus is like saying your child has money left over when he or she gives you back a quarter from a hundred dollar bill that you gave him or her to buy something for $98. That $1.75 went to buy some unapproved candy, but your kid wants credit for giving you any change at all.